Public Act 096-1554
 
SB3087 EnrolledLRB096 20289 RLC 35901 b

    AN ACT concerning State government.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 3. The State Finance Act is amended by changing
Section 6z-78 as follows:
 
    (30 ILCS 105/6z-78)
    Sec. 6z-78. Capital Projects Fund; bonded indebtedness;
transfers. Money in the Capital Projects Fund shall, if and
when the State of Illinois incurs any bonded indebtedness using
the bond authorizations authorization enacted in Public Act
96-36 and this amendatory Act of the 96th General Assembly this
amendatory Act of the 96th General Assembly, be set aside and
used for the purpose of paying and discharging annually the
principal and interest on that bonded indebtedness then due and
payable.
    In addition to other transfers to the General Obligation
Bond Retirement and Interest Fund made pursuant to Section 15
of the General Obligation Bond Act, upon each delivery of
general obligation bonds using bond authorizations
authorization enacted in Public Act 96-36 and this amendatory
Act of the 96th General Assembly this amendatory Act of the
96th General Assembly the State Comptroller shall compute and
certify to the State Treasurer the total amount of principal
of, interest on, and premium, if any, on such bonds during the
then current and each succeeding fiscal year. With respect to
the interest payable on variable rate bonds, such
certifications shall be calculated at the maximum rate of
interest that may be payable during the fiscal year, after
taking into account any credits permitted in the related
indenture or other instrument against the amount of such
interest required to be appropriated for the period.
    (a) Except as provided for in subsection (b), on or before
the last day of each month, the State Treasurer and State
Comptroller shall transfer from the Capital Projects Fund to
the General Obligation Bond Retirement and Interest Fund an
amount sufficient to pay the aggregate of the principal of,
interest on, and premium, if any, on the bonds payable on their
next payment date, divided by the number of monthly transfers
occurring between the last previous payment date (or the
delivery date if no payment date has yet occurred) and the next
succeeding payment date. Interest payable on variable rate
bonds shall be calculated at the maximum rate of interest that
may be payable for the relevant period, after taking into
account any credits permitted in the related indenture or other
instrument against the amount of such interest required to be
appropriated for that period. Interest for which moneys have
already been deposited into the capitalized interest account
within the General Obligation Bond Retirement and Interest Fund
shall not be included in the calculation of the amounts to be
transferred under this subsection.
    (b) On or before the last day of each month, the State
Treasurer and State Comptroller shall transfer from the Capital
Projects Fund to the General Obligation Bond Retirement and
Interest Fund an amount sufficient to pay the aggregate of the
principal of, interest on, and premium, if any, on the bonds
issued prior to January 1, 2012 pursuant to Section 4(d) of the
General Obligation Bond Act payable on their next payment date,
divided by the number of monthly transfers occurring between
the last previous payment date (or the delivery date if no
payment date has yet occurred) and the next succeeding payment
date. If the available balance in the Capital Projects Fund is
not sufficient for the transfer required in this subsection,
the State Treasurer and State Comptroller shall transfer the
difference from the Road Fund to the General Obligation Bond
Retirement and Interest Fund; except that such Road Fund
transfers shall constitute a debt of the Capital Projects Fund
which shall be repaid according to subsection (c). Interest
payable on variable rate bonds shall be calculated at the
maximum rate of interest that may be payable for the relevant
period, after taking into account any credits permitted in the
related indenture or other instrument against the amount of
such interest required to be appropriated for that period.
Interest for which moneys have already been deposited into the
capitalized interest account within the General Obligation
Bond Retirement and Interest Fund shall not be included in the
calculation of the amounts to be transferred under this
subsection.
    (c) On the first day of any month when the Capital Projects
Fund is carrying a debt to the Road Fund due to the provisions
of subsection (b), the State Treasurer and State Comptroller
shall transfer from the Capital Projects Fund to the Road Fund
an amount sufficient to discharge that debt. These transfers to
the Road Fund shall continue until the Capital Projects Fund
has repaid to the Road Fund all transfers made from the Road
Fund pursuant to subsection (b). Notwithstanding any other law
to the contrary, transfers to the Road Fund from the Capital
Projects Fund shall be made prior to any other expenditures or
transfers out of the Capital Projects Fund.
(Source: P.A. 96-36, eff. 7-13-09; 96-820, eff. 11-18-09.)
 
    Section 5. The General Obligation Bond Act is amended by
changing Sections 2, 3, 4, 5, 6, 7, and 9 as follows:
 
    (30 ILCS 330/2)  (from Ch. 127, par. 652)
    Sec. 2. Authorization for Bonds. The State of Illinois is
authorized to issue, sell and provide for the retirement of
General Obligation Bonds of the State of Illinois for the
categories and specific purposes expressed in Sections 2
through 8 of this Act, in the total amount of $41,379,777,443
$37,217,777,443 $36,967,777,443.
    The bonds authorized in this Section 2 and in Section 16 of
this Act are herein called "Bonds".
    Of the total amount of Bonds authorized in this Act, up to
$2,200,000,000 in aggregate original principal amount may be
issued and sold in accordance with the Baccalaureate Savings
Act in the form of General Obligation College Savings Bonds.
    Of the total amount of Bonds authorized in this Act, up to
$300,000,000 in aggregate original principal amount may be
issued and sold in accordance with the Retirement Savings Act
in the form of General Obligation Retirement Savings Bonds.
    Of the total amount of Bonds authorized in this Act, the
additional $10,000,000,000 authorized by Public Act 93-2 and
the $3,466,000,000 authorized by Public Act 96-43 shall be used
solely as provided in Section 7.2.
    The issuance and sale of Bonds pursuant to the General
Obligation Bond Act is an economical and efficient method of
financing the long-term capital needs of the State. This Act
will permit the issuance of a multi-purpose General Obligation
Bond with uniform terms and features. This will not only lower
the cost of registration but also reduce the overall cost of
issuing debt by improving the marketability of Illinois General
Obligation Bonds.
(Source: P.A. 95-1026, eff. 1-12-09; 96-5, eff. 4-3-09; 96-36,
eff. 7-13-09; 96-43, eff. 7-15-09; 96-885, eff. 3-11-10;
96-1000, eff. 7-2-10; revised 9-3-10.)
 
    (30 ILCS 330/3)  (from Ch. 127, par. 653)
    Sec. 3. Capital Facilities. The amount of $8,900,463,443
$7,968,463,443 is authorized to be used for the acquisition,
development, construction, reconstruction, improvement,
financing, architectural planning and installation of capital
facilities within the State, consisting of buildings,
structures, durable equipment, land, interests in land, and the
costs associated with the purchase and implementation of
information technology, including but not limited to the
purchase of hardware and software, for the following specific
purposes:
        (a) $3,007,228,000 $2,511,228,000 for educational
    purposes by State universities and colleges, the Illinois
    Community College Board created by the Public Community
    College Act and for grants to public community colleges as
    authorized by Sections 5-11 and 5-12 of the Public
    Community College Act;
        (b) $1,648,420,000 $1,617,420,000 for correctional
    purposes at State prison and correctional centers;
        (c) $599,183,000 $575,183,000 for open spaces,
    recreational and conservation purposes and the protection
    of land;
        (d) $691,917,000 $664,917,000 for child care
    facilities, mental and public health facilities, and
    facilities for the care of disabled veterans and their
    spouses;
        (e) $1,777,990,000 $1,630,990,000 for use by the
    State, its departments, authorities, public corporations,
    commissions and agencies;
        (f) $818,100 for cargo handling facilities at port
    districts and for breakwaters, including harbor entrances,
    at port districts in conjunction with facilities for small
    boats and pleasure crafts;
        (g) $274,877,074 $248,877,074 for water resource
    management projects;
        (h) $16,940,269 for the provision of facilities for
    food production research and related instructional and
    public service activities at the State universities and
    public community colleges;
        (i) $36,000,000 for grants by the Secretary of State,
    as State Librarian, for central library facilities
    authorized by Section 8 of the Illinois Library System Act
    and for grants by the Capital Development Board to units of
    local government for public library facilities;
        (j) $25,000,000 for the acquisition, development,
    construction, reconstruction, improvement, financing,
    architectural planning and installation of capital
    facilities consisting of buildings, structures, durable
    equipment and land for grants to counties, municipalities
    or public building commissions with correctional
    facilities that do not comply with the minimum standards of
    the Department of Corrections under Section 3-15-2 of the
    Unified Code of Corrections;
        (k) $5,000,000 for grants in fiscal year 1988 by the
    Department of Conservation for improvement or expansion of
    aquarium facilities located on property owned by a park
    district;
        (l) $588,590,000 $432,590,000 to State agencies for
    grants to local governments for the acquisition,
    financing, architectural planning, development,
    alteration, installation, and construction of capital
    facilities consisting of buildings, structures, durable
    equipment, and land; and
        (m) $228,500,000 $203,500,000 for the Illinois Open
    Land Trust Program as defined by the Illinois Open Land
    Trust Act.
    The amounts authorized above for capital facilities may be
used for the acquisition, installation, alteration,
construction, or reconstruction of capital facilities and for
the purchase of equipment for the purpose of major capital
improvements which will reduce energy consumption in State
buildings or facilities.
(Source: P.A. 96-36, eff. 7-13-09; 96-37, eff. 7-13-09;
96-1000, eff. 7-2-10.)
 
    (30 ILCS 330/4)  (from Ch. 127, par. 654)
    Sec. 4. Transportation. The amount of $12,443,799,000
$9,948,799,000 is authorized for use by the Department of
Transportation for the specific purpose of promoting and
assuring rapid, efficient, and safe highway, air and mass
transportation for the inhabitants of the State by providing
monies, including the making of grants and loans, for the
acquisition, construction, reconstruction, extension and
improvement of the following transportation facilities and
equipment, and for the acquisition of real property and
interests in real property required or expected to be required
in connection therewith as follows:
    (a) $5,432,129,000 for State highways, arterial highways,
freeways, roads, bridges, structures separating highways and
railroads and roads, and bridges on roads maintained by
counties, municipalities, townships or road districts for the
following specific purposes:
        (1) $3,330,000,000 for use statewide,
        (2) $3,677,000 for use outside the Chicago urbanized
    area,
        (3) $7,543,000 for use within the Chicago urbanized
    area,
        (4) $13,060,600 for use within the City of Chicago,
        (5) $58,987,500 for use within the counties of Cook,
    DuPage, Kane, Lake, McHenry and Will,
        (6) $18,860,900 for use outside the counties of Cook,
    DuPage, Kane, Lake, McHenry and Will, and
        (7) $2,000,000,000 for use on projects included in
    either (i) the FY09-14 Proposed Highway Improvement
    Program as published by the Illinois Department of
    Transportation in May 2008 or (ii) the FY10-15 Proposed
    Highway Improvement Program to be published by the Illinois
    Department of Transportation in the spring of 2009; except
    that all projects must be maintenance projects for the
    existing State system with the goal of reaching 90%
    acceptable condition in the system statewide and further
    except that all projects must reflect the generally
    accepted historical distribution of projects throughout
    the State.
    (b) $4,280,070,000 $3,130,070,000 for rail facilities and
for mass transit facilities, as defined in Section 2705-305 of
the Department of Transportation Law (20 ILCS 2705/2705-305),
including rapid transit, rail, bus and other equipment used in
connection therewith by the State or any unit of local
government, special transportation district, municipal
corporation or other corporation or public authority
authorized to provide and promote public transportation within
the State or two or more of the foregoing jointly, for the
following specific purposes:
        (1) $3,184,270,000 $2,034,270,000 statewide,
        (2) $83,350,000 for use within the counties of Cook,
    DuPage, Kane, Lake, McHenry and Will,
        (3) $12,450,000 for use outside the counties of Cook,
    DuPage, Kane, Lake, McHenry and Will, and
        (4) $1,000,000,000 for use on projects that shall
    reflect the generally accepted historical distribution of
    projects throughout the State.
    (c) $482,600,000 $371,600,000 for airport or aviation
facilities and any equipment used in connection therewith,
including engineering and land acquisition costs, by the State
or any unit of local government, special transportation
district, municipal corporation or other corporation or public
authority authorized to provide public transportation within
the State, or two or more of the foregoing acting jointly, and
for the making of deposits into the Airport Land Loan Revolving
Fund for loans to public airport owners pursuant to the
Illinois Aeronautics Act.
    (d) $2,249,000,000 $1,015,000,000 for use statewide for
State or local highways, arterial highways, freeways, roads,
bridges, and structures separating highways and railroads and
roads, and for grants to counties, municipalities, townships,
or road districts for planning, engineering, acquisition,
construction, reconstruction, development, improvement,
extension, and all construction-related expenses of the public
infrastructure and other transportation improvement projects
which are related to economic development in the State of
Illinois.
(Source: P.A. 96-5, eff. 4-3-09; 96-36, eff. 7-13-09; 96-37,
eff. 7-13-09.)
 
    (30 ILCS 330/5)  (from Ch. 127, par. 655)
    Sec. 5. School Construction.
    (a) The amount of $58,450,000 is authorized to make grants
to local school districts for the acquisition, development,
construction, reconstruction, rehabilitation, improvement,
financing, architectural planning and installation of capital
facilities, including but not limited to those required for
special education building projects provided for in Article 14
of The School Code, consisting of buildings, structures, and
durable equipment, and for the acquisition and improvement of
real property and interests in real property required, or
expected to be required, in connection therewith.
    (b) $22,550,000, or so much thereof as may be necessary,
for grants to school districts for the making of principal and
interest payments, required to be made, on bonds issued by such
school districts after January 1, 1969, pursuant to any
indenture, ordinance, resolution, agreement or contract to
provide funds for the acquisition, development, construction,
reconstruction, rehabilitation, improvement, architectural
planning and installation of capital facilities consisting of
buildings, structures, durable equipment and land for
educational purposes or for lease payments required to be made
by a school district for principal and interest payments on
bonds issued by a Public Building Commission after January 1,
1969.
    (c) $10,000,000 for grants to school districts for the
acquisition, development, construction, reconstruction,
rehabilitation, improvement, architectural planning and
installation of capital facilities consisting of buildings
structures, durable equipment and land for special education
building projects.
    (d) $9,000,000 for grants to school districts for the
reconstruction, rehabilitation, improvement, financing and
architectural planning of capital facilities, including
construction at another location to replace such capital
facilities, consisting of those public school buildings and
temporary school facilities which, prior to January 1, 1984,
were condemned by the regional superintendent under Section
3-14.22 of The School Code or by any State official having
jurisdiction over building safety.
    (e) $3,050,000,000 for grants to school districts for
school improvement projects authorized by the School
Construction Law. The bonds shall be sold in amounts not to
exceed the following schedule, except any bonds not sold during
one year shall be added to the bonds to be sold during the
remainder of the schedule:
    First year...................................$200,000,000
    Second year..................................$450,000,000
    Third year...................................$500,000,000
    Fourth year..................................$500,000,000
    Fifth year...................................$800,000,000
    Sixth year and thereafter....................$600,000,000
    (f) $1,066,000,000 $420,000,000 grants to school districts
for school implemented projects authorized by the School
Construction Law.
(Source: P.A. 96-36, eff. 7-13-09.)
 
    (30 ILCS 330/6)  (from Ch. 127, par. 656)
    Sec. 6. Anti-Pollution.
    (a) The amount of $422,815,000 $369,815,000 is authorized
for allocation by the Environmental Protection Agency for
grants or loans to units of local government in such amounts,
at such times and for such purpose as the Agency deems
necessary or desirable for the planning, financing, and
construction of municipal sewage treatment works and solid
waste disposal facilities and for making of deposits into the
Water Revolving Fund and the U.S. Environmental Protection Fund
to provide assistance in accordance with the provisions of
Title IV-A of the Environmental Protection Act.
    (b) The amount of $236,500,000 $215,500,000 is authorized
for allocation by the Environmental Protection Agency for
payment of claims submitted to the State and approved for
payment under the Leaking Underground Storage Tank Program
established in Title XVI of the Environmental Protection Act.
(Source: P.A. 96-36, eff. 7-13-09.)
 
    (30 ILCS 330/7)  (from Ch. 127, par. 657)
    Sec. 7. Coal and Energy Development. The amount of
$698,200,000 is authorized to be used by the Department of
Commerce and Economic Opportunity (formerly Department of
Commerce and Community Affairs) for coal and energy development
purposes, pursuant to Sections 2, 3 and 3.1 of the Illinois
Coal and Energy Development Bond Act, for the purposes
specified in Section 8.1 of the Energy Conservation and Coal
Development Act, for the purposes specified in Section 605-332
of the Department of Commerce and Economic Opportunity Law of
the Civil Administrative Code of Illinois, and for the purpose
of facility cost reports prepared pursuant to Sections 1-58 or
1-75(d)(4) of the Illinois Power Agency Act and for the purpose
of development costs pursuant to Section 8.1 of the Energy
Conservation and Coal Development Act. Of this amount:
    (a) $115,000,000 is for the specific purposes of
acquisition, development, construction, reconstruction,
improvement, financing, architectural and technical planning
and installation of capital facilities consisting of
buildings, structures, durable equipment, and land for the
purpose of capital development of coal resources within the
State and for the purposes specified in Section 8.1 of the
Energy Conservation and Coal Development Act;
    (b) $35,000,000 is for the purposes specified in Section
8.1 of the Energy Conservation and Coal Development Act and
making grants to generating stations and coal gasification
facilities within the State of Illinois and to the owner of a
generating station located in Illinois and having at least
three coal-fired generating units with accredited summer
capability greater than 500 megawatts each at such generating
station as provided in Section 6 of that Bond Act;
    (c) $13,200,000 is for research, development and
demonstration of forms of energy other than that derived from
coal, either on or off State property;
    (d) $500,000,000 is for the purpose of providing financial
assistance to new electric generating facilities as provided in
Section 605-332 of the Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois;
and
    (e) $50,000,000 $35,000,000 is for the purpose of facility
cost reports prepared for not more than one facility pursuant
to Section 1-75(d)(4) of the Illinois Power Agency Act and not
more than one facility pursuant to Section 1-58 of the Illinois
Power Agency Act and for the purpose of up to $6,000,000 of
development costs pursuant to Section 8.1 of the Energy
Conservation and Coal Development Act.
(Source: P.A. 95-1026, eff. 1-12-09; 96-781, eff. 8-28-09;
96-1000, eff. 7-2-10; 96-1465, eff. 8-20-10.)
 
    (30 ILCS 330/9)  (from Ch. 127, par. 659)
    Sec. 9. Conditions for Issuance and Sale of Bonds -
Requirements for Bonds.
    (a) Except as otherwise provided in this subsection, Bonds
shall be issued and sold from time to time, in one or more
series, in such amounts and at such prices as may be directed
by the Governor, upon recommendation by the Director of the
Governor's Office of Management and Budget. Bonds shall be in
such form (either coupon, registered or book entry), in such
denominations, payable within 25 years from their date, subject
to such terms of redemption with or without premium, bear
interest payable at such times and at such fixed or variable
rate or rates, and be dated as shall be fixed and determined by
the Director of the Governor's Office of Management and Budget
in the order authorizing the issuance and sale of any series of
Bonds, which order shall be approved by the Governor and is
herein called a "Bond Sale Order"; provided however, that
interest payable at fixed or variable rates shall not exceed
that permitted in the Bond Authorization Act, as now or
hereafter amended. Bonds shall be payable at such place or
places, within or without the State of Illinois, and may be
made registrable as to either principal or as to both principal
and interest, as shall be specified in the Bond Sale Order.
Bonds may be callable or subject to purchase and retirement or
tender and remarketing as fixed and determined in the Bond Sale
Order. Bonds, other than Bonds issued under Section 3 of this
Act for the costs associated with the purchase and
implementation of information technology, (i) except for
refunding Bonds satisfying the requirements of Section 16 of
this Act and sold during fiscal year 2009, 2010, or 2011, must
be issued with principal or mandatory redemption amounts in
equal amounts, with the first maturity issued occurring within
the fiscal year in which the Bonds are issued or within the
next succeeding fiscal year and (ii) must mature or be subject
to mandatory redemption each fiscal year thereafter up to 25
years, except for refunding Bonds satisfying the requirements
of Section 16 of this Act and sold during fiscal year 2009,
2010, or 2011 which must mature or be subject to mandatory
redemption each fiscal year thereafter up to 16 years. Bonds
issued under Section 3 of this Act for the costs associated
with the purchase and implementation of information technology
must be issued with principal or mandatory redemption amounts
in equal amounts, with the first maturity issued occurring with
the fiscal year in which the respective bonds are issued or
with the next succeeding fiscal year, with the respective bonds
issued maturing or subject to mandatory redemption each fiscal
year thereafter up to 10 years. Notwithstanding any provision
of this Act to the contrary, the Bonds authorized by Public Act
96-43 shall be payable within 5 years from their date and must
be issued with principal or mandatory redemption amounts in
equal amounts, with payment of principal or mandatory
redemption beginning in the first fiscal year following the
fiscal year in which the Bonds are issued.
    In the case of any series of Bonds bearing interest at a
variable interest rate ("Variable Rate Bonds"), in lieu of
determining the rate or rates at which such series of Variable
Rate Bonds shall bear interest and the price or prices at which
such Variable Rate Bonds shall be initially sold or remarketed
(in the event of purchase and subsequent resale), the Bond Sale
Order may provide that such interest rates and prices may vary
from time to time depending on criteria established in such
Bond Sale Order, which criteria may include, without
limitation, references to indices or variations in interest
rates as may, in the judgment of a remarketing agent, be
necessary to cause Variable Rate Bonds of such series to be
remarketable from time to time at a price equal to their
principal amount, and may provide for appointment of a bank,
trust company, investment bank, or other financial institution
to serve as remarketing agent in that connection. The Bond Sale
Order may provide that alternative interest rates or provisions
for establishing alternative interest rates, different
security or claim priorities, or different call or amortization
provisions will apply during such times as Variable Rate Bonds
of any series are held by a person providing credit or
liquidity enhancement arrangements for such Bonds as
authorized in subsection (b) of this Section. The Bond Sale
Order may also provide for such variable interest rates to be
established pursuant to a process generally known as an auction
rate process and may provide for appointment of one or more
financial institutions to serve as auction agents and
broker-dealers in connection with the establishment of such
interest rates and the sale and remarketing of such Bonds.
    (b) In connection with the issuance of any series of Bonds,
the State may enter into arrangements to provide additional
security and liquidity for such Bonds, including, without
limitation, bond or interest rate insurance or letters of
credit, lines of credit, bond purchase contracts, or other
arrangements whereby funds are made available to retire or
purchase Bonds, thereby assuring the ability of owners of the
Bonds to sell or redeem their Bonds. The State may enter into
contracts and may agree to pay fees to persons providing such
arrangements, but only under circumstances where the Director
of the Governor's Office of Management and Budget certifies
that he or she reasonably expects the total interest paid or to
be paid on the Bonds, together with the fees for the
arrangements (being treated as if interest), would not, taken
together, cause the Bonds to bear interest, calculated to their
stated maturity, at a rate in excess of the rate that the Bonds
would bear in the absence of such arrangements.
    The State may, with respect to Bonds issued or anticipated
to be issued, participate in and enter into arrangements with
respect to interest rate protection or exchange agreements,
guarantees, or financial futures contracts for the purpose of
limiting, reducing, or managing interest rate exposure. The
authority granted under this paragraph, however, shall not
increase the principal amount of Bonds authorized to be issued
by law. The arrangements may be executed and delivered by the
Director of the Governor's Office of Management and Budget on
behalf of the State. Net payments for such arrangements shall
constitute interest on the Bonds and shall be paid from the
General Obligation Bond Retirement and Interest Fund. The
Director of the Governor's Office of Management and Budget
shall at least annually certify to the Governor and the State
Comptroller his or her estimate of the amounts of such net
payments to be included in the calculation of interest required
to be paid by the State.
    (c) Prior to the issuance of any Variable Rate Bonds
pursuant to subsection (a), the Director of the Governor's
Office of Management and Budget shall adopt an interest rate
risk management policy providing that the amount of the State's
variable rate exposure with respect to Bonds shall not exceed
20%. This policy shall remain in effect while any Bonds are
outstanding and the issuance of Bonds shall be subject to the
terms of such policy. The terms of this policy may be amended
from time to time by the Director of the Governor's Office of
Management and Budget but in no event shall any amendment cause
the permitted level of the State's variable rate exposure with
respect to Bonds to exceed 20%.
    (d) "Build America Bonds" in this Section means Bonds
authorized by Section 54AA of the Internal Revenue Code of
1986, as amended ("Internal Revenue Code"), and bonds issued
from time to time to refund or continue to refund "Build
America Bonds".
    (e) Notwithstanding any other provision of this Section,
Qualified School Construction Bonds shall be issued and sold
from time to time, in one or more series, in such amounts and
at such prices as may be directed by the Governor, upon
recommendation by the Director of the Governor's Office of
Management and Budget. Qualified School Construction Bonds
shall be in such form (either coupon, registered or book
entry), in such denominations, payable within 25 years from
their date, subject to such terms of redemption with or without
premium, and if the Qualified School Construction Bonds are
issued with a supplemental coupon, bear interest payable at
such times and at such fixed or variable rate or rates, and be
dated as shall be fixed and determined by the Director of the
Governor's Office of Management and Budget in the order
authorizing the issuance and sale of any series of Qualified
School Construction Bonds, which order shall be approved by the
Governor and is herein called a "Bond Sale Order"; except that
interest payable at fixed or variable rates, if any, shall not
exceed that permitted in the Bond Authorization Act, as now or
hereafter amended. Qualified School Construction Bonds shall
be payable at such place or places, within or without the State
of Illinois, and may be made registrable as to either principal
or as to both principal and interest, as shall be specified in
the Bond Sale Order. Qualified School Construction Bonds may be
callable or subject to purchase and retirement or tender and
remarketing as fixed and determined in the Bond Sale Order.
Qualified School Construction Bonds must be issued with
principal or mandatory redemption amounts or sinking fund
payments into the General Obligation Bond Retirement and
Interest Fund (or subaccount therefor) in equal amounts, with
the first maturity issued, mandatory redemption payment or
sinking fund payment occurring within the fiscal year in which
the Qualified School Construction Bonds are issued or within
the next succeeding fiscal year, with Qualified School
Construction Bonds issued maturing or subject to mandatory
redemption or with sinking fund payments thereof deposited each
fiscal year thereafter up to 25 years. Sinking fund payments
set forth in this subsection shall be permitted only to the
extent authorized in Section 54F of the Internal Revenue Code
or as otherwise determined by the Director of the Governor's
Office of Management and Budget. "Qualified School
Construction Bonds" in this subsection means Bonds authorized
by Section 54F of the Internal Revenue Code and for bonds
issued from time to time to refund or continue to refund such
"Qualified School Construction Bonds".
    (f) Beginning with the next issuance by the Governor's
Office of Management and Budget to the Procurement Policy Board
of a request for quotation for the purpose of formulating a new
pool of qualified underwriting banks list, all entities
responding to such a request for quotation for inclusion on
that list shall provide a written report to the Governor's
Office of Management and Budget and the Illinois Comptroller.
The written report submitted to the Comptroller shall (i) be
published on the Comptroller's Internet website and (ii) be
used by the Governor's Office of Management and Budget for the
purposes of scoring such a request for quotation. The written
report, at a minimum, shall:
        (1) disclose whether, within the past 3 months,
    pursuant to its credit default swap market-making
    activities, the firm has entered into any State of Illinois
    credit default swaps ("CDS");
        (2) include, in the event of State of Illinois CDS
    activity, disclosure of the firm's cumulative notional
    volume of State of Illinois CDS trades and the firm's
    outstanding gross and net notional amount of State of
    Illinois CDS, as of the end of the current 3-month period;
        (3) indicate, pursuant to the firm's proprietary
    trading activities, disclosure of whether the firm, within
    the past 3 months, has entered into any proprietary trades
    for its own account in State of Illinois CDS;
        (4) include, in the event of State of Illinois
    proprietary trades, disclosure of the firm's outstanding
    gross and net notional amount of proprietary State of
    Illinois CDS and whether the net position is short or long
    credit protection, as of the end of the current 3-month
    period;
        (5) list all time periods during the past 3 months
    during which the firm held net long or net short State of
    Illinois CDS proprietary credit protection positions, the
    amount of such positions, and whether those positions were
    net long or net short credit protection positions; and
        (6) indicate whether, within the previous 3 months, the
    firm released any publicly available research or marketing
    reports that reference State of Illinois CDS and include
    those research or marketing reports as attachments.
    (g) All entities included on a Governor's Office of
Management and Budget's pool of qualified underwriting banks
list shall, as soon as possible after the effective date of
this amendatory Act of the 96th General Assembly, but not later
than January 21, 2011, and on a quarterly fiscal basis
thereafter, provide a written report to the Governor's Office
of Management and Budget and the Illinois Comptroller. The
written reports submitted to the Comptroller shall be published
on the Comptroller's Internet website. The written reports, at
a minimum, shall:
        (1) disclose whether, within the past 3 months,
    pursuant to its credit default swap market-making
    activities, the firm has entered into any State of Illinois
    credit default swaps ("CDS");
        (2) include, in the event of State of Illinois CDS
    activity, disclosure of the firm's cumulative notional
    volume of State of Illinois CDS trades and the firm's
    outstanding gross and net notional amount of State of
    Illinois CDS, as of the end of the current 3-month period;
        (3) indicate, pursuant to the firm's proprietary
    trading activities, disclosure of whether the firm, within
    the past 3 months, has entered into any proprietary trades
    for its own account in State of Illinois CDS;
        (4) include, in the event of State of Illinois
    proprietary trades, disclosure of the firm's outstanding
    gross and net notional amount of proprietary State of
    Illinois CDS and whether the net position is short or long
    credit protection, as of the end of the current 3-month
    period;
        (5) list all time periods during the past 3 months
    during which the firm held net long or net short State of
    Illinois CDS proprietary credit protection positions, the
    amount of such positions, and whether those positions were
    net long or net short credit protection positions; and
        (6) indicate whether, within the previous 3 months, the
    firm released any publicly available research or marketing
    reports that reference State of Illinois CDS and include
    those research or marketing reports as attachments.
(Source: P.A. 96-18, eff. 6-26-09; 96-37, eff. 7-13-09; 96-43,
eff. 7-15-09; 96-828, eff. 12-2-09.)
 
    Section 10. The Build Illinois Bond Act is amended by
changing Sections 2 and 4 as follows:
 
    (30 ILCS 425/2)  (from Ch. 127, par. 2802)
    Sec. 2. Authorization for Bonds. The State of Illinois is
authorized to issue, sell and provide for the retirement of
limited obligation bonds, notes and other evidences of
indebtedness of the State of Illinois in the total principal
amount of $5,703,509,000 $4,615,509,000 herein called "Bonds".
Such authorized amount of Bonds shall be reduced from time to
time by amounts, if any, which are equal to the moneys received
by the Department of Revenue in any fiscal year pursuant to
Section 3-1001 of the "Illinois Vehicle Code", as amended, in
excess of the Annual Specified Amount (as defined in Section 3
of the "Retailers' Occupation Tax Act", as amended) and
transferred at the end of such fiscal year from the General
Revenue Fund to the Build Illinois Purposes Fund (now
abolished) as provided in Section 3-1001 of said Code;
provided, however, that no such reduction shall affect the
validity or enforceability of any Bonds issued prior to such
reduction. Such amount of authorized Bonds shall be exclusive
of any refunding Bonds issued pursuant to Section 15 of this
Act and exclusive of any Bonds issued pursuant to this Section
which are redeemed, purchased, advance refunded, or defeased in
accordance with paragraph (f) of Section 4 of this Act. Bonds
shall be issued for the categories and specific purposes
expressed in Section 4 of this Act.
(Source: P.A. 96-36, eff. 7-13-09.)
 
    (30 ILCS 425/4)  (from Ch. 127, par. 2804)
    Sec. 4. Purposes of Bonds. Bonds shall be issued for the
following purposes and in the approximate amounts as set forth
below:
    (a) $3,213,000,000 $2,917,000,000 for the expenses of
issuance and sale of Bonds, including bond discounts, and for
planning, engineering, acquisition, construction,
reconstruction, development, improvement and extension of the
public infrastructure in the State of Illinois, including: the
making of loans or grants to local governments for waste
disposal systems, water and sewer line extensions and water
distribution and purification facilities, rail or air or water
port improvements, gas and electric utility extensions,
publicly owned industrial and commercial sites, buildings used
for public administration purposes and other public
infrastructure capital improvements; the making of loans or
grants to units of local government for financing and
construction of wastewater facilities, including grants to
serve unincorporated areas; refinancing or retiring bonds
issued between January 1, 1987 and January 1, 1990 by home rule
municipalities, debt service on which is provided from a tax
imposed by home rule municipalities prior to January 1, 1990 on
the sale of food and drugs pursuant to Section 8-11-1 of the
Home Rule Municipal Retailers' Occupation Tax Act or Section
8-11-5 of the Home Rule Municipal Service Occupation Tax Act;
the making of deposits not to exceed $70,000,000 in the
aggregate into the Water Pollution Control Revolving Fund to
provide assistance in accordance with the provisions of Title
IV-A of the Environmental Protection Act; the planning,
engineering, acquisition, construction, reconstruction,
alteration, expansion, extension and improvement of highways,
bridges, structures separating highways and railroads, rest
areas, interchanges, access roads to and from any State or
local highway and other transportation improvement projects
which are related to economic development activities; the
making of loans or grants for planning, engineering,
rehabilitation, improvement or construction of rail and
transit facilities; the planning, engineering, acquisition,
construction, reconstruction and improvement of watershed,
drainage, flood control, recreation and related improvements
and facilities, including expenses related to land and easement
acquisition, relocation, control structures, channel work and
clearing and appurtenant work; the making of grants for
improvement and development of zoos and park district field
houses and related structures; and the making of grants for
improvement and development of Navy Pier and related
structures.
    (b) $541,000,000 $196,000,000 for fostering economic
development and increased employment and the well being of the
citizens of Illinois, including: the making of grants for
improvement and development of McCormick Place and related
structures; the planning and construction of a
microelectronics research center, including the planning,
engineering, construction, improvement, renovation and
acquisition of buildings, equipment and related utility
support systems; the making of loans to businesses and
investments in small businesses; acquiring real properties for
industrial or commercial site development; acquiring,
rehabilitating and reconveying industrial and commercial
properties for the purpose of expanding employment and
encouraging private and other public sector investment in the
economy of Illinois; the payment of expenses associated with
siting the Superconducting Super Collider Particle Accelerator
in Illinois and with its acquisition, construction,
maintenance, operation, promotion and support; the making of
loans for the planning, engineering, acquisition,
construction, improvement and conversion of facilities and
equipment which will foster the use of Illinois coal; the
payment of expenses associated with the promotion,
establishment, acquisition and operation of small business
incubator facilities and agribusiness research facilities,
including the lease, purchase, renovation, planning,
engineering, construction and maintenance of buildings,
utility support systems and equipment designated for such
purposes and the establishment and maintenance of centralized
support services within such facilities; and the making of
grants or loans to units of local government for Urban
Development Action Grant and Housing Partnership programs.
    (c) $1,741,358,100 $1,352,358,100 for the development and
improvement of educational, scientific, technical and
vocational programs and facilities and the expansion of health
and human services for all citizens of Illinois, including: the
making of construction and improvement grants and loans to
public libraries and library systems; the making of grants and
loans for planning, engineering, acquisition and construction
of a new State central library in Springfield; the planning,
engineering, acquisition and construction of an animal and
dairy sciences facility; the planning, engineering,
acquisition and construction of a campus and all related
buildings, facilities, equipment and materials for Richland
Community College; the acquisition, rehabilitation and
installation of equipment and materials for scientific and
historical surveys; the making of grants or loans for
distribution to eligible vocational education instructional
programs for the upgrading of vocational education programs,
school shops and laboratories, including the acquisition,
rehabilitation and installation of technical equipment and
materials; the making of grants or loans for distribution to
eligible local educational agencies for the upgrading of math
and science instructional programs, including the acquisition
of instructional equipment and materials; miscellaneous
capital improvements for universities and community colleges
including the planning, engineering, construction,
reconstruction, remodeling, improvement, repair and
installation of capital facilities and costs of planning,
supplies, equipment, materials, services, and all other
required expenses; the making of grants or loans for repair,
renovation and miscellaneous capital improvements for
privately operated colleges and universities and community
colleges, including the planning, engineering, acquisition,
construction, reconstruction, remodeling, improvement, repair
and installation of capital facilities and costs of planning,
supplies, equipment, materials, services, and all other
required expenses; and the making of grants or loans for
distribution to local governments for hospital and other health
care facilities including the planning, engineering,
acquisition, construction, reconstruction, remodeling,
improvement, repair and installation of capital facilities and
costs of planning, supplies, equipment, materials, services
and all other required expenses.
    (d) $208,150,900 $150,150,900 for protection,
preservation, restoration and conservation of environmental
and natural resources, including: the making of grants to soil
and water conservation districts for the planning and
implementation of conservation practices and for funding
contracts with the Soil Conservation Service for watershed
planning; the making of grants to units of local government for
the capital development and improvement of recreation areas,
including planning and engineering costs, sewer projects,
including planning and engineering costs and water projects,
including planning and engineering costs, and for the
acquisition of open space lands, including the acquisition of
easements and other property interests of less than fee simple
ownership; the acquisition and related costs and development
and management of natural heritage lands, including natural
areas and areas providing habitat for endangered species and
nongame wildlife, and buffer area lands; the acquisition and
related costs and development and management of habitat lands,
including forest, wildlife habitat and wetlands; and the
removal and disposition of hazardous substances, including the
cost of project management, equipment, laboratory analysis,
and contractual services necessary for preventative and
corrective actions related to the preservation, restoration
and conservation of the environment, including deposits not to
exceed $60,000,000 in the aggregate into the Hazardous Waste
Fund and the Brownfields Redevelopment Fund for improvements in
accordance with the provisions of Titles V and XVII of the
Environmental Protection Act.
    (e) The amount specified in paragraph (a) above shall
include an amount necessary to pay reasonable expenses of each
issuance and sale of the Bonds, as specified in the related
Bond Sale Order (hereinafter defined).
    (f) Any unexpended proceeds from any sale of Bonds which
are held in the Build Illinois Bond Fund may be used to redeem,
purchase, advance refund, or defease any Bonds outstanding.
(Source: P.A. 96-36, eff. 7-13-09; 96-503, eff. 8-14-09;
96-1000, eff. 7-2-10.)
 
    Section 15. The Illinois Pension Code is amended by
changing Sections 1-113.14, 2-124, 14-131, 15-155, 16-158,
18-131, and 22A-111 and by adding Section 1-113.15 as follows:
 
    (40 ILCS 5/1-113.14)
    Sec. 1-113.14. Investment services for retirement systems,
pension funds, and investment boards, except those funds
established under Articles 3 and 4.
    (a) For the purposes of this Section, "investment services"
means services provided by an investment adviser or a
consultant other than qualified fund-of-fund management
services as defined in Section 1-113.15.
    (b) The selection and appointment of an investment adviser
or consultant for investment services by the board of a
retirement system, pension fund, or investment board subject to
this Code, except those whose investments are restricted by
Section 1-113.2, shall be made and awarded in accordance with
this Section. All contracts for investment services shall be
awarded by the board using a competitive process that is
substantially similar to the process required for the
procurement of professional and artistic services under
Article 35 of the Illinois Procurement Code. Each board of
trustees shall adopt a policy in accordance with this
subsection (b) within 60 days after the effective date of this
amendatory Act of the 96th General Assembly. The policy shall
be posted on its web site and filed with the Illinois
Procurement Policy Board. Exceptions to this Section are
allowed for (i) sole source procurements, (ii) emergency
procurements, and (iii) at the discretion of the pension fund,
retirement system, or board of investment, contracts that are
nonrenewable and one year or less in duration, so long as the
contract has a value of less than $20,000. All exceptions
granted under this Section must be published on the system's,
fund's, or board's web site, shall name the person authorizing
the procurement, and shall include a brief explanation of the
reason for the exception.
    A person, other than a trustee or an employee of a
retirement system, pension fund, or investment board, may not
act as a consultant or investment adviser under this Section
unless that person is registered as an investment adviser under
the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1,
et seq.) or a bank, as defined in the federal Investment
Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.).
    (c) Investment services provided by an investment adviser
or a consultant appointed under this Section shall be rendered
pursuant to a written contract between the investment adviser
or consultant and the board.
    The contract shall include all of the following:
        (1) Acknowledgement in writing by the investment
    adviser or consultant that he or she is a fiduciary with
    respect to the pension fund or retirement system.
        (2) The description of the board's investment policy
    and notice that the policy is subject to change.
        (3) (i) Full disclosure of direct and indirect fees,
    commissions, penalties, and other compensation, including
    reimbursement for expenses, that may be paid by or on
    behalf of the consultant in connection with the provision
    of services to the pension fund or retirement system and
    (ii) a requirement that the consultant update the
    disclosure promptly after a modification of those payments
    or an additional payment.
        (4) A requirement that the investment adviser or
    consultant, in conjunction with the board's staff, submit
    periodic written reports, on at least a quarterly basis,
    for the board's review at its regularly scheduled meetings.
    All returns on investment shall be reported as net returns
    after payment of all fees, commissions, and any other
    compensation.
        (5) Disclosure of the names and addresses of (i) the
    consultant or investment adviser; (ii) any entity that is a
    parent of, or owns a controlling interest in, the
    consultant or investment adviser; (iii) any entity that is
    a subsidiary of, or in which a controlling interest is
    owned by, the consultant or investment adviser; (iv) any
    persons who have an ownership or distributive income share
    in the consultant or investment adviser that is in excess
    of 7.5%; or (v) serves as an executive officer of the
    consultant or investment adviser.
        (6) A disclosure of the names and addresses of all
    subcontractors, if applicable, and the expected amount of
    money each will receive under the contract, including an
    acknowledgment that the contractor must promptly make
    notification, in writing, if at any time during the term of
    the contract a contractor adds or changes any
    subcontractors. For purposes of this subparagraph (6),
    "subcontractor" does not include non-investment related
    professionals or professionals offering services that are
    not directly related to the investment of assets, such as
    legal counsel, actuary, proxy-voting services, services
    used to track compliance with legal standards, and
    investment fund of funds where the board has no direct
    contractual relationship with the investment advisers or
    partnerships.
        (7) A description of service to be performed.
        (8) A description of the need for the service.
        (9) A description of the plan for post-performance
    review.
        (10) A description of the qualifications necessary.
        (11) The duration of the contract.
        (12) The method for charging and measuring cost.
    (d) Notwithstanding any other provision of law, a
retirement system, pension fund, or investment board subject to
this Code, except those whose investments are restricted by
Section 1-113.2 of this Code, shall not enter into a contract
with a consultant that exceeds 5 years in duration. No contract
to provide consulting services may be renewed or extended. At
the end of the term of a contract, however, the consultant is
eligible to compete for a new contract as provided in this
Section. No retirement system, pension fund, or investment
board shall attempt to avoid or contravene the restrictions of
this subsection (d) by any means.
    (e) Within 60 days after the effective date of this
amendatory Act of the 96th General Assembly, each investment
adviser or consultant currently providing services or subject
to an existing contract for the provision of services must
disclose to the board of trustees all direct and indirect fees,
commissions, penalties, and other compensation paid by or on
behalf of the investment adviser or consultant in connection
with the provision of those services and shall update that
disclosure promptly after a modification of those payments or
an additional payment. The person shall update the disclosure
promptly after a modification of those payments or an
additional payment. The disclosures required by this
subsection (e) shall be in writing and shall include the date
and amount of each payment and the name and address of each
recipient of a payment.
    (f) The retirement system, pension fund, or board of
investment shall develop uniform documents that shall be used
for the solicitation, review, and acceptance of all investment
services. The form shall include the terms contained in
subsection (c) of this Section. All such uniform documents
shall be posted on the retirement system's, pension fund's, or
investment board's web site.
    (g) A description of every contract for investment services
shall be posted in a conspicuous manner on the web site of the
retirement system, pension fund, or investment board. The
description must include the name of the person or entity
awarded a contract, the total amount applicable to the
contract, the total fees paid or to be paid, and a disclosure
approved by the board describing the factors that contributed
to the selection of an investment adviser or consultant.
(Source: P.A. 96-6, eff. 4-3-09.)
 
    (40 ILCS 5/1-113.15 new)
    Sec. 1-113.15. Qualified fund-of-fund management services.
    (a) As used in this Section:
    "Qualified fund-of-fund management services" means either
(i) the services of an investment adviser acting in its
capacity as an investment manager of a fund-of-funds or (ii) an
investment adviser acting in its capacity as an investment
manager of a separate account that is invested on a
side-by-side basis in a substantially identical manner to a
fund-of-funds, in each case pursuant to qualified written
agreements.
    "Qualified written agreements" means one or more written
contracts to which the investment adviser and the board are
parties and includes all of the following: (i) the matters
described in items (1), (4), (5), (7), (11), and (12) of
subsection (c) of Section 1-113.14; (ii) a description of any
fees, commissions, penalties, and other compensation payable,
if any, directly by the retirement system, pension fund, or
investment board (which shall not include any fees,
commissions, penalties, and other compensation payable from
the assets of the fund-of-funds or separate account); (iii) a
description (or method of calculation) of the fees and expenses
payable by the Fund to the investment adviser and the timing of
the payment of the fees or expenses; and (iv) a description (or
method of calculation) of any carried interest or other
performance based interests, fees, or payments allocable by the
Fund to the investment adviser or an affiliate of the
investment adviser and the priority of distributions with
respect to such interest.
    (b) A description of every contract for qualified
fund-of-fund management services must be posted in a
conspicuous manner on the web site of the retirement system,
pension fund, or investment board. The description must include
the name of the fund-of-funds, the name of its investment
adviser, the total investment commitment of the retirement
system, pension fund, or investment board to invest in such
fund-of-funds, and a disclosure approved by the board
describing the factors that contributed to the investment in
such fund-of-funds. No information that is exempt from
inspection pursuant to Section 7 of the Freedom of Information
Act shall be disclosed under this Section.
 
    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
    Sec. 2-124. Contributions by State.
    (a) The State shall make contributions to the System by
appropriations of amounts which, together with the
contributions of participants, interest earned on investments,
and other income will meet the cost of maintaining and
administering the System on a 90% funded basis in accordance
with actuarial recommendations.
    (b) The Board shall determine the amount of State
contributions required for each fiscal year on the basis of the
actuarial tables and other assumptions adopted by the Board and
the prescribed rate of interest, using the formula in
subsection (c).
    (c) For State fiscal years 2011 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
    For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$4,157,000.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$5,220,300.
    For each of State fiscal years 2008 through 2009, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010 is
$10,454,000 and shall be made from the proceeds of bonds sold
in fiscal year 2010 pursuant to Section 7.2 of the General
Obligation Bond Act, less (i) the pro rata share of bond sale
expenses determined by the System's share of total bond
proceeds, (ii) any amounts received from the General Revenue
Fund in fiscal year 2010, and (iii) any reduction in bond
proceeds due to the issuance of discounted bonds, if
applicable.
    Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
    Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
    Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 2-134, shall not
exceed an amount equal to (i) the amount of the required State
contribution that would have been calculated under this Section
for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued in fiscal year 2003 for the purposes of that Section
7.2, as determined and certified by the Comptroller, that is
the same as the System's portion of the total moneys
distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State
fiscal years 2008 through 2010, however, the amount referred to
in item (i) shall be increased, as a percentage of the
applicable employee payroll, in equal increments calculated
from the sum of the required State contribution for State
fiscal year 2007 plus the applicable portion of the State's
total debt service payments for fiscal year 2007 on the bonds
issued in fiscal year 2003 for the purposes of Section 7.2 of
the General Obligation Bond Act, so that, by State fiscal year
2011, the State is contributing at the rate otherwise required
under this Section.
    (d) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
    As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
    (e) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09.)
 
    (40 ILCS 5/14-131)
    Sec. 14-131. Contributions by State.
    (a) The State shall make contributions to the System by
appropriations of amounts which, together with other employer
contributions from trust, federal, and other funds, employee
contributions, investment income, and other income, will be
sufficient to meet the cost of maintaining and administering
the System on a 90% funded basis in accordance with actuarial
recommendations.
    For the purposes of this Section and Section 14-135.08,
references to State contributions refer only to employer
contributions and do not include employee contributions that
are picked up or otherwise paid by the State or a department on
behalf of the employee.
    (b) The Board shall determine the total amount of State
contributions required for each fiscal year on the basis of the
actuarial tables and other assumptions adopted by the Board,
using the formula in subsection (e).
    The Board shall also determine a State contribution rate
for each fiscal year, expressed as a percentage of payroll,
based on the total required State contribution for that fiscal
year (less the amount received by the System from
appropriations under Section 8.12 of the State Finance Act and
Section 1 of the State Pension Funds Continuing Appropriation
Act, if any, for the fiscal year ending on the June 30
immediately preceding the applicable November 15 certification
deadline), the estimated payroll (including all forms of
compensation) for personal services rendered by eligible
employees, and the recommendations of the actuary.
    For the purposes of this Section and Section 14.1 of the
State Finance Act, the term "eligible employees" includes
employees who participate in the System, persons who may elect
to participate in the System but have not so elected, persons
who are serving a qualifying period that is required for
participation, and annuitants employed by a department as
described in subdivision (a)(1) or (a)(2) of Section 14-111.
    (c) Contributions shall be made by the several departments
for each pay period by warrants drawn by the State Comptroller
against their respective funds or appropriations based upon
vouchers stating the amount to be so contributed. These amounts
shall be based on the full rate certified by the Board under
Section 14-135.08 for that fiscal year. From the effective date
of this amendatory Act of the 93rd General Assembly through the
payment of the final payroll from fiscal year 2004
appropriations, the several departments shall not make
contributions for the remainder of fiscal year 2004 but shall
instead make payments as required under subsection (a-1) of
Section 14.1 of the State Finance Act. The several departments
shall resume those contributions at the commencement of fiscal
year 2005.
    (c-1) Notwithstanding subsection (c) of this Section, for
fiscal year 2010 only, contributions by the several departments
are not required to be made for General Revenue Funds payrolls
processed by the Comptroller. Payrolls paid by the several
departments from all other State funds must continue to be
processed pursuant to subsection (c) of this Section.
    (c-2) For State fiscal year 2010 only, on or as soon as
possible after the 15th day of each month the Board shall
submit vouchers for payment of State contributions to the
System, in a total monthly amount of one-twelfth of the fiscal
year 2010 General Revenue Fund appropriation to the System.
    (d) If an employee is paid from trust funds or federal
funds, the department or other employer shall pay employer
contributions from those funds to the System at the certified
rate, unless the terms of the trust or the federal-State
agreement preclude the use of the funds for that purpose, in
which case the required employer contributions shall be paid by
the State. From the effective date of this amendatory Act of
the 93rd General Assembly through the payment of the final
payroll from fiscal year 2004 appropriations, the department or
other employer shall not pay contributions for the remainder of
fiscal year 2004 but shall instead make payments as required
under subsection (a-1) of Section 14.1 of the State Finance
Act. The department or other employer shall resume payment of
contributions at the commencement of fiscal year 2005.
    (e) For State fiscal years 2011 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
    For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section; except that (i) for State
fiscal year 1998, for all purposes of this Code and any other
law of this State, the certified percentage of the applicable
employee payroll shall be 5.052% for employees earning eligible
creditable service under Section 14-110 and 6.500% for all
other employees, notwithstanding any contrary certification
made under Section 14-135.08 before the effective date of this
amendatory Act of 1997, and (ii) in the following specified
State fiscal years, the State contribution to the System shall
not be less than the following indicated percentages of the
applicable employee payroll, even if the indicated percentage
will produce a State contribution in excess of the amount
otherwise required under this subsection and subsection (a):
9.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
2002; 10.6% in FY 2003; and 10.8% in FY 2004.
    Notwithstanding any other provision of this Article, the
total required State contribution to the System for State
fiscal year 2006 is $203,783,900.
    Notwithstanding any other provision of this Article, the
total required State contribution to the System for State
fiscal year 2007 is $344,164,400.
    For each of State fiscal years 2008 through 2009, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
    Notwithstanding any other provision of this Article, the
total required State General Revenue Fund contribution for
State fiscal year 2010 is $723,703,100 and shall be made from
the proceeds of bonds sold in fiscal year 2010 pursuant to
Section 7.2 of the General Obligation Bond Act, less (i) the
pro rata share of bond sale expenses determined by the System's
share of total bond proceeds, (ii) any amounts received from
the General Revenue Fund in fiscal year 2010, and (iii) any
reduction in bond proceeds due to the issuance of discounted
bonds, if applicable.
    Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
    Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
    Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 14-135.08, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued in fiscal year 2003 for the purposes of that Section
7.2, as determined and certified by the Comptroller, that is
the same as the System's portion of the total moneys
distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State
fiscal years 2008 through 2010, however, the amount referred to
in item (i) shall be increased, as a percentage of the
applicable employee payroll, in equal increments calculated
from the sum of the required State contribution for State
fiscal year 2007 plus the applicable portion of the State's
total debt service payments for fiscal year 2007 on the bonds
issued in fiscal year 2003 for the purposes of Section 7.2 of
the General Obligation Bond Act, so that, by State fiscal year
2011, the State is contributing at the rate otherwise required
under this Section.
    (f) After the submission of all payments for eligible
employees from personal services line items in fiscal year 2004
have been made, the Comptroller shall provide to the System a
certification of the sum of all fiscal year 2004 expenditures
for personal services that would have been covered by payments
to the System under this Section if the provisions of this
amendatory Act of the 93rd General Assembly had not been
enacted. Upon receipt of the certification, the System shall
determine the amount due to the System based on the full rate
certified by the Board under Section 14-135.08 for fiscal year
2004 in order to meet the State's obligation under this
Section. The System shall compare this amount due to the amount
received by the System in fiscal year 2004 through payments
under this Section and under Section 6z-61 of the State Finance
Act. If the amount due is more than the amount received, the
difference shall be termed the "Fiscal Year 2004 Shortfall" for
purposes of this Section, and the Fiscal Year 2004 Shortfall
shall be satisfied under Section 1.2 of the State Pension Funds
Continuing Appropriation Act. If the amount due is less than
the amount received, the difference shall be termed the "Fiscal
Year 2004 Overpayment" for purposes of this Section, and the
Fiscal Year 2004 Overpayment shall be repaid by the System to
the Pension Contribution Fund as soon as practicable after the
certification.
    (g) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
    As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
    (h) For purposes of determining the required State
contribution to the System for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the System's actuarially assumed rate of return.
    (i) After the submission of all payments for eligible
employees from personal services line items paid from the
General Revenue Fund in fiscal year 2010 have been made, the
Comptroller shall provide to the System a certification of the
sum of all fiscal year 2010 expenditures for personal services
that would have been covered by payments to the System under
this Section if the provisions of this amendatory Act of the
96th General Assembly had not been enacted. Upon receipt of the
certification, the System shall determine the amount due to the
System based on the full rate certified by the Board under
Section 14-135.08 for fiscal year 2010 in order to meet the
State's obligation under this Section. The System shall compare
this amount due to the amount received by the System in fiscal
year 2010 through payments under this Section. If the amount
due is more than the amount received, the difference shall be
termed the "Fiscal Year 2010 Shortfall" for purposes of this
Section, and the Fiscal Year 2010 Shortfall shall be satisfied
under Section 1.2 of the State Pension Funds Continuing
Appropriation Act. If the amount due is less than the amount
received, the difference shall be termed the "Fiscal Year 2010
Overpayment" for purposes of this Section, and the Fiscal Year
2010 Overpayment shall be repaid by the System to the General
Revenue Fund as soon as practicable after the certification.
(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09; 96-45,
eff. 7-15-09; 96-1000, eff. 7-2-10.)
 
    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
    Sec. 15-155. Employer contributions.
    (a) The State of Illinois shall make contributions by
appropriations of amounts which, together with the other
employer contributions from trust, federal, and other funds,
employee contributions, income from investments, and other
income of this System, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis
in accordance with actuarial recommendations.
    The Board shall determine the amount of State contributions
required for each fiscal year on the basis of the actuarial
tables and other assumptions adopted by the Board and the
recommendations of the actuary, using the formula in subsection
(a-1).
    (a-1) For State fiscal years 2011 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
    For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$166,641,900.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$252,064,100.
    For each of State fiscal years 2008 through 2009, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010 is
$702,514,000 and shall be made from the State Pensions Fund and
proceeds of bonds sold in fiscal year 2010 pursuant to Section
7.2 of the General Obligation Bond Act, less (i) the pro rata
share of bond sale expenses determined by the System's share of
total bond proceeds, (ii) any amounts received from the General
Revenue Fund in fiscal year 2010, (iii) any reduction in bond
proceeds due to the issuance of discounted bonds, if
applicable.
    Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
    Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
    Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 15-165, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued in fiscal year 2003 for the purposes of that Section
7.2, as determined and certified by the Comptroller, that is
the same as the System's portion of the total moneys
distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State
fiscal years 2008 through 2010, however, the amount referred to
in item (i) shall be increased, as a percentage of the
applicable employee payroll, in equal increments calculated
from the sum of the required State contribution for State
fiscal year 2007 plus the applicable portion of the State's
total debt service payments for fiscal year 2007 on the bonds
issued in fiscal year 2003 for the purposes of Section 7.2 of
the General Obligation Bond Act, so that, by State fiscal year
2011, the State is contributing at the rate otherwise required
under this Section.
    (b) If an employee is paid from trust or federal funds, the
employer shall pay to the Board contributions from those funds
which are sufficient to cover the accruing normal costs on
behalf of the employee. However, universities having employees
who are compensated out of local auxiliary funds, income funds,
or service enterprise funds are not required to pay such
contributions on behalf of those employees. The local auxiliary
funds, income funds, and service enterprise funds of
universities shall not be considered trust funds for the
purpose of this Article, but funds of alumni associations,
foundations, and athletic associations which are affiliated
with the universities included as employers under this Article
and other employers which do not receive State appropriations
are considered to be trust funds for the purpose of this
Article.
    (b-1) The City of Urbana and the City of Champaign shall
each make employer contributions to this System for their
respective firefighter employees who participate in this
System pursuant to subsection (h) of Section 15-107. The rate
of contributions to be made by those municipalities shall be
determined annually by the Board on the basis of the actuarial
assumptions adopted by the Board and the recommendations of the
actuary, and shall be expressed as a percentage of salary for
each such employee. The Board shall certify the rate to the
affected municipalities as soon as may be practical. The
employer contributions required under this subsection shall be
remitted by the municipality to the System at the same time and
in the same manner as employee contributions.
    (c) Through State fiscal year 1995: The total employer
contribution shall be apportioned among the various funds of
the State and other employers, whether trust, federal, or other
funds, in accordance with actuarial procedures approved by the
Board. State of Illinois contributions for employers receiving
State appropriations for personal services shall be payable
from appropriations made to the employers or to the System. The
contributions for Class I community colleges covering earnings
other than those paid from trust and federal funds, shall be
payable solely from appropriations to the Illinois Community
College Board or the System for employer contributions.
    (d) Beginning in State fiscal year 1996, the required State
contributions to the System shall be appropriated directly to
the System and shall be payable through vouchers issued in
accordance with subsection (c) of Section 15-165, except as
provided in subsection (g).
    (e) The State Comptroller shall draw warrants payable to
the System upon proper certification by the System or by the
employer in accordance with the appropriation laws and this
Code.
    (f) Normal costs under this Section means liability for
pensions and other benefits which accrues to the System because
of the credits earned for service rendered by the participants
during the fiscal year and expenses of administering the
System, but shall not include the principal of or any
redemption premium or interest on any bonds issued by the Board
or any expenses incurred or deposits required in connection
therewith.
    (g) If the amount of a participant's earnings for any
academic year used to determine the final rate of earnings,
determined on a full-time equivalent basis, exceeds the amount
of his or her earnings with the same employer for the previous
academic year, determined on a full-time equivalent basis, by
more than 6%, the participant's employer shall pay to the
System, in addition to all other payments required under this
Section and in accordance with guidelines established by the
System, the present value of the increase in benefits resulting
from the portion of the increase in earnings that is in excess
of 6%. This present value shall be computed by the System on
the basis of the actuarial assumptions and tables used in the
most recent actuarial valuation of the System that is available
at the time of the computation. The System may require the
employer to provide any pertinent information or
documentation.
    Whenever it determines that a payment is or may be required
under this subsection (g), the System shall calculate the
amount of the payment and bill the employer for that amount.
The bill shall specify the calculations used to determine the
amount due. If the employer disputes the amount of the bill, it
may, within 30 days after receipt of the bill, apply to the
System in writing for a recalculation. The application must
specify in detail the grounds of the dispute and, if the
employer asserts that the calculation is subject to subsection
(h) or (i) of this Section, must include an affidavit setting
forth and attesting to all facts within the employer's
knowledge that are pertinent to the applicability of subsection
(h) or (i). Upon receiving a timely application for
recalculation, the System shall review the application and, if
appropriate, recalculate the amount due.
    The employer contributions required under this subsection
(f) may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not paid
within 90 days after receipt of the bill, then interest will be
charged at a rate equal to the System's annual actuarially
assumed rate of return on investment compounded annually from
the 91st day after receipt of the bill. Payments must be
concluded within 3 years after the employer's receipt of the
bill.
    (h) This subsection (h) applies only to payments made or
salary increases given on or after June 1, 2005 but before July
1, 2011. The changes made by Public Act 94-1057 shall not
require the System to refund any payments received before July
31, 2006 (the effective date of Public Act 94-1057).
    When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases paid to
participants under contracts or collective bargaining
agreements entered into, amended, or renewed before June 1,
2005.
    When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases paid to a
participant at a time when the participant is 10 or more years
from retirement eligibility under Section 15-135.
    When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases resulting from
overload work, including a contract for summer teaching, or
overtime when the employer has certified to the System, and the
System has approved the certification, that: (i) in the case of
overloads (A) the overload work is for the sole purpose of
academic instruction in excess of the standard number of
instruction hours for a full-time employee occurring during the
academic year that the overload is paid and (B) the earnings
increases are equal to or less than the rate of pay for
academic instruction computed using the participant's current
salary rate and work schedule; and (ii) in the case of
overtime, the overtime was necessary for the educational
mission.
    When assessing payment for any amount due under subsection
(g), the System shall exclude any earnings increase resulting
from (i) a promotion for which the employee moves from one
classification to a higher classification under the State
Universities Civil Service System, (ii) a promotion in academic
rank for a tenured or tenure-track faculty position, or (iii) a
promotion that the Illinois Community College Board has
recommended in accordance with subsection (k) of this Section.
These earnings increases shall be excluded only if the
promotion is to a position that has existed and been filled by
a member for no less than one complete academic year and the
earnings increase as a result of the promotion is an increase
that results in an amount no greater than the average salary
paid for other similar positions.
    (i) When assessing payment for any amount due under
subsection (g), the System shall exclude any salary increase
described in subsection (h) of this Section given on or after
July 1, 2011 but before July 1, 2014 under a contract or
collective bargaining agreement entered into, amended, or
renewed on or after June 1, 2005 but before July 1, 2011.
Notwithstanding any other provision of this Section, any
payments made or salary increases given after June 30, 2014
shall be used in assessing payment for any amount due under
subsection (g) of this Section.
    (j) The System shall prepare a report and file copies of
the report with the Governor and the General Assembly by
January 1, 2007 that contains all of the following information:
        (1) The number of recalculations required by the
    changes made to this Section by Public Act 94-1057 for each
    employer.
        (2) The dollar amount by which each employer's
    contribution to the System was changed due to
    recalculations required by Public Act 94-1057.
        (3) The total amount the System received from each
    employer as a result of the changes made to this Section by
    Public Act 94-4.
        (4) The increase in the required State contribution
    resulting from the changes made to this Section by Public
    Act 94-1057.
    (k) The Illinois Community College Board shall adopt rules
for recommending lists of promotional positions submitted to
the Board by community colleges and for reviewing the
promotional lists on an annual basis. When recommending
promotional lists, the Board shall consider the similarity of
the positions submitted to those positions recognized for State
universities by the State Universities Civil Service System.
The Illinois Community College Board shall file a copy of its
findings with the System. The System shall consider the
findings of the Illinois Community College Board when making
determinations under this Section. The System shall not exclude
any earnings increases resulting from a promotion when the
promotion was not submitted by a community college. Nothing in
this subsection (k) shall require any community college to
submit any information to the Community College Board.
    (l) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
    As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
    (m) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
96-43, eff. 7-15-09.)
 
    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
    Sec. 16-158. Contributions by State and other employing
units.
    (a) The State shall make contributions to the System by
means of appropriations from the Common School Fund and other
State funds of amounts which, together with other employer
contributions, employee contributions, investment income, and
other income, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis
in accordance with actuarial recommendations.
    The Board shall determine the amount of State contributions
required for each fiscal year on the basis of the actuarial
tables and other assumptions adopted by the Board and the
recommendations of the actuary, using the formula in subsection
(b-3).
    (a-1) Annually, on or before November 15, the Board shall
certify to the Governor the amount of the required State
contribution for the coming fiscal year. The certification
shall include a copy of the actuarial recommendations upon
which it is based.
    On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2005, taking
into account the amounts appropriated to and received by the
System under subsection (d) of Section 7.2 of the General
Obligation Bond Act.
    On or before July 1, 2005, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2006, taking
into account the changes in required State contributions made
by this amendatory Act of the 94th General Assembly.
    (b) Through State fiscal year 1995, the State contributions
shall be paid to the System in accordance with Section 18-7 of
the School Code.
    (b-1) Beginning in State fiscal year 1996, on the 15th day
of each month, or as soon thereafter as may be practicable, the
Board shall submit vouchers for payment of State contributions
to the System, in a total monthly amount of one-twelfth of the
required annual State contribution certified under subsection
(a-1). From the effective date of this amendatory Act of the
93rd General Assembly through June 30, 2004, the Board shall
not submit vouchers for the remainder of fiscal year 2004 in
excess of the fiscal year 2004 certified contribution amount
determined under this Section after taking into consideration
the transfer to the System under subsection (a) of Section
6z-61 of the State Finance Act. These vouchers shall be paid by
the State Comptroller and Treasurer by warrants drawn on the
funds appropriated to the System for that fiscal year.
    If in any month the amount remaining unexpended from all
other appropriations to the System for the applicable fiscal
year (including the appropriations to the System under Section
8.12 of the State Finance Act and Section 1 of the State
Pension Funds Continuing Appropriation Act) is less than the
amount lawfully vouchered under this subsection, the
difference shall be paid from the Common School Fund under the
continuing appropriation authority provided in Section 1.1 of
the State Pension Funds Continuing Appropriation Act.
    (b-2) Allocations from the Common School Fund apportioned
to school districts not coming under this System shall not be
diminished or affected by the provisions of this Article.
    (b-3) For State fiscal years 2011 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
    For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section; except that in the
following specified State fiscal years, the State contribution
to the System shall not be less than the following indicated
percentages of the applicable employee payroll, even if the
indicated percentage will produce a State contribution in
excess of the amount otherwise required under this subsection
and subsection (a), and notwithstanding any contrary
certification made under subsection (a-1) before the effective
date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
2003; and 13.56% in FY 2004.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$534,627,700.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$738,014,500.
    For each of State fiscal years 2008 through 2009, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010 is
$2,089,268,000 and shall be made from the proceeds of bonds
sold in fiscal year 2010 pursuant to Section 7.2 of the General
Obligation Bond Act, less (i) the pro rata share of bond sale
expenses determined by the System's share of total bond
proceeds, (ii) any amounts received from the Common School Fund
in fiscal year 2010, and (iii) any reduction in bond proceeds
due to the issuance of discounted bonds, if applicable.
    Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
    Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
    Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under subsection (a-1), shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued in fiscal year 2003 for the purposes of that Section
7.2, as determined and certified by the Comptroller, that is
the same as the System's portion of the total moneys
distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State
fiscal years 2008 through 2010, however, the amount referred to
in item (i) shall be increased, as a percentage of the
applicable employee payroll, in equal increments calculated
from the sum of the required State contribution for State
fiscal year 2007 plus the applicable portion of the State's
total debt service payments for fiscal year 2007 on the bonds
issued in fiscal year 2003 for the purposes of Section 7.2 of
the General Obligation Bond Act, so that, by State fiscal year
2011, the State is contributing at the rate otherwise required
under this Section.
    (c) Payment of the required State contributions and of all
pensions, retirement annuities, death benefits, refunds, and
other benefits granted under or assumed by this System, and all
expenses in connection with the administration and operation
thereof, are obligations of the State.
    If members are paid from special trust or federal funds
which are administered by the employing unit, whether school
district or other unit, the employing unit shall pay to the
System from such funds the full accruing retirement costs based
upon that service, as determined by the System. Employer
contributions, based on salary paid to members from federal
funds, may be forwarded by the distributing agency of the State
of Illinois to the System prior to allocation, in an amount
determined in accordance with guidelines established by such
agency and the System.
    (d) Effective July 1, 1986, any employer of a teacher as
defined in paragraph (8) of Section 16-106 shall pay the
employer's normal cost of benefits based upon the teacher's
service, in addition to employee contributions, as determined
by the System. Such employer contributions shall be forwarded
monthly in accordance with guidelines established by the
System.
    However, with respect to benefits granted under Section
16-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
of Section 16-106, the employer's contribution shall be 12%
(rather than 20%) of the member's highest annual salary rate
for each year of creditable service granted, and the employer
shall also pay the required employee contribution on behalf of
the teacher. For the purposes of Sections 16-133.4 and
16-133.5, a teacher as defined in paragraph (8) of Section
16-106 who is serving in that capacity while on leave of
absence from another employer under this Article shall not be
considered an employee of the employer from which the teacher
is on leave.
    (e) Beginning July 1, 1998, every employer of a teacher
shall pay to the System an employer contribution computed as
follows:
        (1) Beginning July 1, 1998 through June 30, 1999, the
    employer contribution shall be equal to 0.3% of each
    teacher's salary.
        (2) Beginning July 1, 1999 and thereafter, the employer
    contribution shall be equal to 0.58% of each teacher's
    salary.
The school district or other employing unit may pay these
employer contributions out of any source of funding available
for that purpose and shall forward the contributions to the
System on the schedule established for the payment of member
contributions.
    These employer contributions are intended to offset a
portion of the cost to the System of the increases in
retirement benefits resulting from this amendatory Act of 1998.
    Each employer of teachers is entitled to a credit against
the contributions required under this subsection (e) with
respect to salaries paid to teachers for the period January 1,
2002 through June 30, 2003, equal to the amount paid by that
employer under subsection (a-5) of Section 6.6 of the State
Employees Group Insurance Act of 1971 with respect to salaries
paid to teachers for that period.
    The additional 1% employee contribution required under
Section 16-152 by this amendatory Act of 1998 is the
responsibility of the teacher and not the teacher's employer,
unless the employer agrees, through collective bargaining or
otherwise, to make the contribution on behalf of the teacher.
    If an employer is required by a contract in effect on May
1, 1998 between the employer and an employee organization to
pay, on behalf of all its full-time employees covered by this
Article, all mandatory employee contributions required under
this Article, then the employer shall be excused from paying
the employer contribution required under this subsection (e)
for the balance of the term of that contract. The employer and
the employee organization shall jointly certify to the System
the existence of the contractual requirement, in such form as
the System may prescribe. This exclusion shall cease upon the
termination, extension, or renewal of the contract at any time
after May 1, 1998.
    (f) If the amount of a teacher's salary for any school year
used to determine final average salary exceeds the member's
annual full-time salary rate with the same employer for the
previous school year by more than 6%, the teacher's employer
shall pay to the System, in addition to all other payments
required under this Section and in accordance with guidelines
established by the System, the present value of the increase in
benefits resulting from the portion of the increase in salary
that is in excess of 6%. This present value shall be computed
by the System on the basis of the actuarial assumptions and
tables used in the most recent actuarial valuation of the
System that is available at the time of the computation. If a
teacher's salary for the 2005-2006 school year is used to
determine final average salary under this subsection (f), then
the changes made to this subsection (f) by Public Act 94-1057
shall apply in calculating whether the increase in his or her
salary is in excess of 6%. For the purposes of this Section,
change in employment under Section 10-21.12 of the School Code
on or after June 1, 2005 shall constitute a change in employer.
The System may require the employer to provide any pertinent
information or documentation. The changes made to this
subsection (f) by this amendatory Act of the 94th General
Assembly apply without regard to whether the teacher was in
service on or after its effective date.
    Whenever it determines that a payment is or may be required
under this subsection, the System shall calculate the amount of
the payment and bill the employer for that amount. The bill
shall specify the calculations used to determine the amount
due. If the employer disputes the amount of the bill, it may,
within 30 days after receipt of the bill, apply to the System
in writing for a recalculation. The application must specify in
detail the grounds of the dispute and, if the employer asserts
that the calculation is subject to subsection (g) or (h) of
this Section, must include an affidavit setting forth and
attesting to all facts within the employer's knowledge that are
pertinent to the applicability of that subsection. Upon
receiving a timely application for recalculation, the System
shall review the application and, if appropriate, recalculate
the amount due.
    The employer contributions required under this subsection
(f) may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not paid
within 90 days after receipt of the bill, then interest will be
charged at a rate equal to the System's annual actuarially
assumed rate of return on investment compounded annually from
the 91st day after receipt of the bill. Payments must be
concluded within 3 years after the employer's receipt of the
bill.
    (g) This subsection (g) applies only to payments made or
salary increases given on or after June 1, 2005 but before July
1, 2011. The changes made by Public Act 94-1057 shall not
require the System to refund any payments received before July
31, 2006 (the effective date of Public Act 94-1057).
    When assessing payment for any amount due under subsection
(f), the System shall exclude salary increases paid to teachers
under contracts or collective bargaining agreements entered
into, amended, or renewed before June 1, 2005.
    When assessing payment for any amount due under subsection
(f), the System shall exclude salary increases paid to a
teacher at a time when the teacher is 10 or more years from
retirement eligibility under Section 16-132 or 16-133.2.
    When assessing payment for any amount due under subsection
(f), the System shall exclude salary increases resulting from
overload work, including summer school, when the school
district has certified to the System, and the System has
approved the certification, that (i) the overload work is for
the sole purpose of classroom instruction in excess of the
standard number of classes for a full-time teacher in a school
district during a school year and (ii) the salary increases are
equal to or less than the rate of pay for classroom instruction
computed on the teacher's current salary and work schedule.
    When assessing payment for any amount due under subsection
(f), the System shall exclude a salary increase resulting from
a promotion (i) for which the employee is required to hold a
certificate or supervisory endorsement issued by the State
Teacher Certification Board that is a different certification
or supervisory endorsement than is required for the teacher's
previous position and (ii) to a position that has existed and
been filled by a member for no less than one complete academic
year and the salary increase from the promotion is an increase
that results in an amount no greater than the lesser of the
average salary paid for other similar positions in the district
requiring the same certification or the amount stipulated in
the collective bargaining agreement for a similar position
requiring the same certification.
    When assessing payment for any amount due under subsection
(f), the System shall exclude any payment to the teacher from
the State of Illinois or the State Board of Education over
which the employer does not have discretion, notwithstanding
that the payment is included in the computation of final
average salary.
    (h) When assessing payment for any amount due under
subsection (f), the System shall exclude any salary increase
described in subsection (g) of this Section given on or after
July 1, 2011 but before July 1, 2014 under a contract or
collective bargaining agreement entered into, amended, or
renewed on or after June 1, 2005 but before July 1, 2011.
Notwithstanding any other provision of this Section, any
payments made or salary increases given after June 30, 2014
shall be used in assessing payment for any amount due under
subsection (f) of this Section.
    (i) The System shall prepare a report and file copies of
the report with the Governor and the General Assembly by
January 1, 2007 that contains all of the following information:
        (1) The number of recalculations required by the
    changes made to this Section by Public Act 94-1057 for each
    employer.
        (2) The dollar amount by which each employer's
    contribution to the System was changed due to
    recalculations required by Public Act 94-1057.
        (3) The total amount the System received from each
    employer as a result of the changes made to this Section by
    Public Act 94-4.
        (4) The increase in the required State contribution
    resulting from the changes made to this Section by Public
    Act 94-1057.
    (j) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
    As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
    (k) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
96-43, eff. 7-15-09.)
 
    (40 ILCS 5/18-131)  (from Ch. 108 1/2, par. 18-131)
    Sec. 18-131. Financing; employer contributions.
    (a) The State of Illinois shall make contributions to this
System by appropriations of the amounts which, together with
the contributions of participants, net earnings on
investments, and other income, will meet the costs of
maintaining and administering this System on a 90% funded basis
in accordance with actuarial recommendations.
    (b) The Board shall determine the amount of State
contributions required for each fiscal year on the basis of the
actuarial tables and other assumptions adopted by the Board and
the prescribed rate of interest, using the formula in
subsection (c).
    (c) For State fiscal years 2011 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
    For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$29,189,400.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$35,236,800.
    For each of State fiscal years 2008 through 2009, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010 is
$78,832,000 and shall be made from the proceeds of bonds sold
in fiscal year 2010 pursuant to Section 7.2 of the General
Obligation Bond Act, less (i) the pro rata share of bond sale
expenses determined by the System's share of total bond
proceeds, (ii) any amounts received from the General Revenue
Fund in fiscal year 2010, and (iii) any reduction in bond
proceeds due to the issuance of discounted bonds, if
applicable.
    Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
    Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
    Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 18-140, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued in fiscal year 2003 for the purposes of that Section
7.2, as determined and certified by the Comptroller, that is
the same as the System's portion of the total moneys
distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State
fiscal years 2008 through 2010, however, the amount referred to
in item (i) shall be increased, as a percentage of the
applicable employee payroll, in equal increments calculated
from the sum of the required State contribution for State
fiscal year 2007 plus the applicable portion of the State's
total debt service payments for fiscal year 2007 on the bonds
issued in fiscal year 2003 for the purposes of Section 7.2 of
the General Obligation Bond Act, so that, by State fiscal year
2011, the State is contributing at the rate otherwise required
under this Section.
    (d) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
    As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
    (e) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09.)
 
    (40 ILCS 5/22A-111)  (from Ch. 108 1/2, par. 22A-111)
    Sec. 22A-111. The Board shall manage the investments of any
pension fund, retirement system, or education fund for the
purpose of obtaining a total return on investments for the long
term. It also shall perform such other functions as may be
assigned or directed by the General Assembly.
    The authority of the board to manage pension fund
investments and the liability shall begin when there has been a
physical transfer of the pension fund investments to the board
and placed in the custody of the State Treasurer.
    The authority of the board to manage monies from the
education fund for investment and the liability of the board
shall begin when there has been a physical transfer of
education fund investments to the board and placed in the
custody of the State Treasurer.
    The board may not delegate its management functions, but it
may, but is not required to, arrange to compensate for
personalized investment advisory service for any or all
investments under its control, with any national or state bank
or trust company authorized to do a trust business and
domiciled in Illinois, or other financial institution
organized under the laws of Illinois, or an investment advisor
who is qualified under Federal Investment Advisors Act of 1940
and is registered under the Illinois Securities Law of 1953.
Nothing contained herein shall prevent the Board from
subscribing to general investment research services available
for purchase or use by others. The Board shall also have the
authority to compensate for accounting services.
    This Section shall not be construed to prohibit the
Illinois State Board of Investment from directly investing
pension assets in public market investments, private
investments, real estate investments, or other investments
authorized by this Code.
(Source: P.A. 84-1127.)
 
    Section 20. The School Construction Law is amended by
adding Section 5-38 as follows:
 
    (105 ILCS 230/5-38 new)
    Sec. 5-38. Fiscal Year 2002 escalation. If a school
district has been issued a school construction grant in Fiscal
Year 2010 and the school district was on the FY2002 priority
ranking, the Capital Development Board shall escalate the state
share grant amount of the project on a 3% annual escalation
rate.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.